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Business News/ Home-page / Lax regulation sees India becoming a haven for illegal online pharmacies

Lax regulation sees India becoming a haven for illegal online pharmacies

Lax regulation sees India becoming a haven for illegal online pharmacies


Mumbai: With no regulatory control over drug advertisements on television or the Internet, India is fast becoming a haven for illegal online pharmacies that hijack popular pharma brands to sell counterfeit medicines.

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Several websites that promote sales of drugs illegally were found to be hosted in India, according to the Summer 2008 Brandjacking Index, an independent annual brand abuse analysis by US-based MarkMonitor Inc.

“Our year-over-year trend data shows a grave situation: The number of people looking to save money by buying pharmaceuticals over the Web is growing rapidly while scam-mers are more aggressively exploiting loose controls over online sales of drugs," Irfan Salim, president and chief executive of MarkMonitor, said about the report.

The survey mirrors a report by UN’s International Narcotics Control Board in March, which said a growing number of illegal online pharmacies based in India appeared to be the West’s source for pharmaceutical drugs that cannot otherwise be shipped freely into that region or require prescriptions from doctors.

The report had blamed this on the lack of an adequate regulatory framework for the pharma industry in India.

Indeed, India’s 54-year-old Drugs and Magic Remedies Act, under which drug advertisements are regulated, has not yet been updated to include television and the Web.

“Our law currently doesn’t identify online advertisement or trade of drugs, though there are measures to check the authenticity of drug ingredients or finished formulations when they are physically transferred from one place to another," said M. Venkateswarlu, former drug controller general of India.

As drug controller general, Venkateswarlu had in 2006 proposed updating the law to expand its scope, with provisions to prevent misguiding advertisements and false claims about health care products and medical devices on television and the Internet. The proposal was not pursued effectively at the cabinet level due to budgetary constraints and practical difficulties in its implementation, he said.

Surinder Singh, the current drug controller general, couldn’t be reached for comment through his mobile phone.

India is among other large countries infested by the illegal online pharmacies. The 2008 brandjacking report cites the case of an online pharmacy labelled as Canadian but hosted in the Russian Federation, as per its Internet protocol (IP) address.

“This site had last year listed a Los Angeles area code, but this year the company shows a Texas phone number," the report says. “We made a purchase from this website and our credit card statement reflects an Israeli merchant account; as of our publication date, the drugs have not been delivered."

The report cites another online exchange site hosted in India, but with Russian contact information, that sells loose pills at a 93% discount over the retail price. The significant discount, the study says, indicates the website is selling fake, diluted, alternative, stolen, grey market or expired medicines.

The MarkMonitor survey reveals that the online pharmacy trade largely revolves around six leading brands prescribed for anti-impotency, sexual enhancement, and other top-selling drugs of multinational companies.

According to the brandjacking study, 60% of the presumed fraudulent online pharmacies and business-to-business exchange sites the agency had identified in 2007 are still operating.

Last year, MarkMonitor’s study said exchange sites that sell drugs in bulk quantities could corrupt the overall supply chain by “injecting potentially phony and dangerous medications into the market". It had said 31% of the exchange site listings originated in China, followed by 26% in the US and 19% in India.

The total number of online pharmacies operating globally as in June was 2,986, of which only two were certified, according to MarkMonitor. A dramatic rise in traffic has led to a sizable increase in revenue, estimated at $12 billion, the study said, based on industry statistics for purchase rates of 0.05% of the traffic and average order size of $70.

“But as far as India is concerned, no estimates are available," said R.B. Smarta, managing director, Interlink Marketing Consultancy Pvt. Ltd, a Mumbai-based pharma marketing consultant.

“This is an industry that isn’t just going away, but is getting better at conducting their illicit activities and preying on the public," MarkMonitor said in its latest report. “There is more traffic to online pharmacy sites that are doing more business, and a 36% growth in the availability of drugs in the online supply chain."

The other disturbing trend, according to the survey, is the use of search engine advertising to draw in more unsuspecting buyers to misleading websites. “We identified 11,836 search ads; none of the ads that we analyzed were from legitimate brandholders. More than two-thirds of the ads showed trademark abuses. All of these ads led visitors to misleading sites that were selling these drugs," the report said.

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Published: 14 Sep 2008, 10:50 PM IST
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